City of Annapolis Audit Committee met Sept. 24.
Here is the minutes provided by the committee:
Members Present: Chairman Fred Paone, Alderwoman Rhonda, Alderwoman Pindell-Charles,
Alderwoman Shaneka Henson, Julie Mussog, Jared Littmann, City Manager
Teresa Sutherland, Finance Director Jodee Dickinson
Members Absent: Al Kirchner
City Staff Present: Nikki Pletzer
Agenda
Alderwoman Pindell-Charles motioned for approval of the Agenda. Mr. Littmann seconded. Mr. Littmann suggested that the content of the Agenda be more robust and include indication of possible closed sessions during meeting/prior to close of meeting. The agenda was approved.
Minutes
Ms. Mussog motioned for approval of the minutes from the August 27, 2018 meeting. Mr. Littmann seconded. The minutes were approved.
“Fraud, Waste & Abuse” Hotline
Ms. Mussog questioned if the City currently uses a “Fraud, Waste, & Abuse” hotline. City Manager Sutherland and Finance Director Dickinson commented that there was not a current hotline, but they were both involved in the creation of a similar hotline at the County. Discussion continued regarding the purpose of the hotline, how to structure the system, legal requirements, etc. City Manager Sutherland will report back to the committee in November regarding the Hotline’s creation, purpose, and functionality. The goal is to have a hotline established by the end of the calendar year.
Audit Committee Membership
City Manager Sutherland petitioned the Committee to remove herself and Finance Director Dickinson from the membership of the Audit Committee. Both would continue to participate in the Committee by providing staff support. The Committee agreed that the City Manager should request that the Law Department draft legislation to remove the City Manager and the Finance Director from the composition of the Audit Committee.
The Code designates that a member of the Financial Advisory Commission (FAC) participates as a member of the Audit Committee. Chairman Paone agreed to reach out to the chair of the FAC, Fred Sussman, to request they designate a member to participate.
Departmental Audits: Recreation & Parks
Ms. Mussog asked Finance Director Dickinson to review with the Committee her plans for reviewing internal controls City-wide. Finance Director Dickinson stated her goal is to review internal controls across all departments. Her plan is to make site visits at the various departments, review current procedures, and review appropriate cash handling procedures with the individual employees. Finance Director Dickinson added that the City currently has a Cash- Handling Policy in place, but it is not specific to each location, nor does it have any special provisions related to each location.
Discussion continued regarding the different types of audits and the benefits of beginning with financial audits, with the intention of initiating performance audits once the appropriate goals and objectives are established so the auditor can determine the appropriate audit tests. Finance Director Dickinson added that performance audits can be more expensive, depending on the auditee, the number of locations, and the objectives of the audit. Chairman Paone asked if there were any internal options for audit. Finance Director Dickinson commented that she does have a former auditor on staff, Kim Maronski. That employee is currently performing other duties, but she intends to assign her to internal audits in the future.
After discussion, the Audit Committee agreed to begin with a financial audit to examine internal controls. They also agreed to begin with the Recreation & Parks. Alderwoman Henson requested clarification regarding the City’s annual audit and these department specific financial audits. City Manager Sutherland explained that the annual audit thoroughly reviews the operations of the Finance Department. Recreation & Parks revenue would not be deemed materially significant during the City-wide audit. In addition, it is management’s duty to access risk related to internal controls, not the audit firm.
Mr. Littmann motioned that the Audit Committee request that the City Manager release an RFP to review cash handling procedures related to operations at the Recreation & Parks department and provide recommendations to implement improvements. Alderwoman Henson seconded. The motioned was approved.
City Code §2.60 Performance Review
Ms. Mussog referenced City Code §2.60 Performance Review and questioned if the City enforces that portion of the Code. She also questioned when the annually required Resolution was last adopted. After continued discussion regarding §2.60, City Manager Sutherland stated that she would email the Department Heads to outline her expectations regarding their goals and objectives. The City will move forward with the legislation as described in the Code.
Meeting Schedule
The Committee agreed to a meeting schedule of the 3rd Monday of every month at 8:00 am.
Ms. Mussog motioned to adjourn. Mr. Littmann seconded. The meeting adjourned at 9:51 am.
https://www.annapolis.gov/AgendaCenter/ViewFile/Minutes/_10152018-1448
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